Under the guidelines of the Third Plenary Session of the 16th CPC Central Committee, the All-China Federation of Industry and Commerce submitted its "Proposal for Encouraging Private Enterprises to Participate in State-owned Enterprise Reconstruction."

It suggests encouraging private enterprises to participate in the reorganization of SOEs. In recent years, the increased activity of private industry in this regard has strengthened the performance of the SOEs.

A firm policy on this issue should be set out as quickly as possible to resolve issues lingering from decades ago and reduce the costs of reorganization and reform.

The proposal also suggests that the property right exchange market be improved and regulated.

The National Development and Reform Commission, the Ministry of Labor and Social Security and the State-owned Assets Supervision and Administration Commission jointly replied that they would carefully consider the proposal in formulating related policies or regulations.

The government agencies agreed that private-sector participation can help to improve management, cut operating costs and expand fund sources of SOEs. At the same time, the private companies can increase their own capital funding and benefit from established infrastructure and existing human resources.

(China.org.cn March 11, 2005)